Stocks mostly fall, but tech shares lift the Nasdaq to a new high

Stocks mostly fell Monday, and broad-market indexes inched modestly backward at the start of a busy week of corporate earnings reports and a meeting of the Federal Reserve. Technology stocks, though, added to their big gains for the year and helped push the Nasdaq composite to another record.

The Standard & Poor’s 500 lost 2.63 points, or 0.1%, to 2,469.91 after nine of the 11 sectors that make up the index logged losses. That marks the first three-day losing streak for the index in a month, though the index is still within a fraction of a percent of its record.

The Dow Jones industrial average fell 66.90 points, or 0.3%, to 21,513.17. The Nasdaq composite rose 23.05 points, or 0.4%, to 6,410.81.

The Nasdaq is up 19.1% this year, nearly twice as much as broader-market indexes, as investors have latched onto technology stocks in their search for strong growth as the global economy remains sluggish.

Amazon.com and several other big-name tech companies are set to release their second-quarter results in coming days, part of a busy week in which more than a third of S&P 500 companies are due to report.

Expectations are high: Analysts forecast tech stocks in the S&P 500 will report 16% growth in earnings per share, according to S&P Global Market Intelligence. That’s up from last month’s forecast of 10.9% growth. Companies will need to meet expectations to justify the big moves their stock prices have already made.

“The group did have a strong start to the year, and there are some questions about how long tech can continue to rally,” said Ann Miletti, senior portfolio manager at Wells Fargo Asset Management. “Overall, what we’re believing to be true is that second-quarter results are going to come in, in general, better than expected. But the second-half outlook is the most important thing, and we’ll see.”

Also on Monday, the International Monetary Fund held its forecast for global economic growth this year steady at 3.5%, but that masks some movements underneath. It raised its forecast for economic growth in Europe, Japan and China. But it cut its outlook for the United States on the assumption that politicians in Washington won’t be as helpful for growth as earlier expected.

The Federal Reserve’s policymaking committee begins a two-day meeting Tuesday. Last month, it decided to raise short-term interest rates for the third time since December. The central bank also announced plans to start gradually paring its bond holdings later this year, a move that could cause rates to rise. Most investors expect the Fed to hold rates steady at this week’s meeting and possibly raise them one more time this year.

Investors in recent weeks have questioned whether the European Central Bank will begin to tap the brakes on its own stimulus for the economy.

The biggest decliner in the S&P 500 on Monday was Hasbro. The toymaker sank 9.4% to $105 despite reporting stronger-than-expected earnings for the latest quarter. The stock had already been up nearly 50% for the year before the earnings release, and analysts said some investors may have been nervous after Hasbro cited some softness in its Brazil and Britain markets.

Rival toymaker Mattel, based in El Segundo, fell 3.8% to $20.80.

Shares were also weak across the sporting goods retail industry after Hibbett Sports warned that its sales have been under even more pressure than analysts expected for the three months through July. Retailers of all types have been battling against increased competition from online rivals, some better than others.

Hibbett sank 33.5% to $13.10. Foot Locker fell 4.6% to $45.05. Dick’s Sporting Goods dropped 5.5% to $35.12.

On the opposite end was WebMD Health, which soared 19.8% to $66.10 after a portfolio company of investment-firm KKR said it will buy the health information website for $66.50 per share in cash.

Nektar Therapeutics rose 3.2% to $22.95 after the San Francisco drug company said it got a $150-million upfront from a partnership with Eli Lilly on treatments for inflammatory diseases.

In overseas markets, Japan’s Nikkei 225 lost 0.6%, and South Korea’s Kospi inched up 0.1%. Hong Kong’s Hang Seng added 0.5%, and India’s Sensex added 0.7%.

France’s CAC 40 rose 0.2%, Germany’s DAX fell 0.3% and the FTSE 100 in London dropped 1%.

In the commodities market, benchmark U.S. crude rose 57 cents, or 1.2%, to $46.34 a barrel. Brent crude, the standard for international oil prices, rose 54 cents, or 1.1%, to $48.60 a barrel.

Natural gas fell 7 cents to $2.90 per 1,000 cubic feet. Wholesale gasoline slipped a penny to $1.56 a gallon. Heating oil was nearly flat at $1.52 a gallon.

Gold fell 60 cents to settle at $1,254.30 an ounce, silver slipped 1 cent to $16.44 an ounce, and copper rose a penny to $2.74 per pound.

The yield on the 10-year Treasury note ticked up to 2.25% from 2.24%. The two-year yield rose to 1.36% from 1.34%.

The euro fell to $1.1645 from $1.1677. The dollar ticked up to 111.11 yen from 111.04 yen. The British pound rose to $1.3036 from $1.3007.

UPDATES:

3:35 p.m.: This article was updated with closing prices, context and analyst comment.

1:20 p.m.: This article was updated with the close of markets.

9:10 a.m.: This article was updated with market prices and context.

This article was originally published at 7 a.m.